CGS International (Thailand) Securities (CGSI) has highlighted the recent earthquake in Thailand, which ranks among the strongest ever felt in the country, as a potential catalyst for change among urban residents living in high-rise buildings lacking proper seismic design. Concerns over safety could prompt a shift in consumer behavior, particularly among middle- to upper-income individuals, toward preferring low-rise housing.
Should this shift occur, the home improvement sector is poised for potential gains. An increase in demand for detached homes would likely lead to a shift in material purchases from large condominium contractors to smaller-scale builders. These builders form the core customer base for companies such as GLOBAL, DOHOME, Thai Watsadu, and MegaHome.
In Bangkok, where land is scarce, and new low-rise housing may be financially out of reach for many, there is also a rising trend in purchasing old shophouses or second-hand homes for renovation. This trend would continue to drive demand for remodeling materials, benefiting companies like HMPRO.
While CGSI does not anticipate a collapse in the demand for high-rise buildings, the market could become increasingly polarized. Projects led by top-tier developers with strong engineering credentials might maintain their appeal. In contrast, high-rise initiatives perceived as structurally vulnerable or still under construction could suffer from diminished buyer confidence.
This analysis underscores the need for investors and stakeholders to closely monitor these evolving trends within Thailand’s real estate market.